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Topics How does public opinion affect energy policy? Where is the public on energy? –Evidence from recent public opinion polls What, if anything, does this mean for energy economists? 2

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How does public opinion affect energy policy? Public attitudes are one factor among many that policy makers take into account Others include: –Industry positions & information –NGO positions & information –Local opinion - “all politics is local” –Economic reality Government fiscal constraints Costs of alternative policies The state of technology Policy makers also know that public attitudes change over time 3

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Where is the public on energy? Frequently, national polls cover energy along with other topics National samples usually are sufficient to give high confidence to results –However, questions often don’t confront those interviewed with direct costs to them of policy choices –Further, how questions are phrased can affect what answers are received –Still, in the aggregate national polling results reveal what a majority of the public thinks about energy at a given point in time 4

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Could policy choices influence public opinion rather than the other way around? Which way does cause and effect run? Little evidence that the public thinks highly of policy makers –Job approval ratings (WSJ/NBC) Congress – 12% of public approves, 83% disapprove President Obama - 45% approve, 50% disapprove –Direction of Country – 31% right direction, 59% wrong direction (Real Clear Politics) Political leaders compete for public approval, not other way around Difficult to conclude that public opinion simply reflects policy maker choices 5

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Basic question: Is Energy Important to the Public? Extremely or Very Important (%) Moderately Important (%) Not Important (%) The Economy86114 Education85113 Health Care81154 Energy 78175 Gas Prices 72217 Budget deficit711710 The environment70227 7 Source: AP/NORC April 2012.

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Next question: What Should be Done? More production of oil, gas and coal? More energy efficiency? More production of alternate energy (wind, solar, etc.)? Both equally or don’t know 365113 315910 345411 8 Sources: 1 st two results are Gallup 2013; last is Pew 2013 The public appears to favor conservation/efficiency and alternate energy over conventional fossil fuel production.

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Attitudes Towards a Carbon Tax Favor (%)Oppose (%)Indifferent or Unsure (%) Impose a carbon tax with monies used to pay down the national debt 61325 Impose a carbon tax even if it results in $180/yr payment by average U.S. household 38566 Straight carbon tax294525 Carbon tax with $500 per person rebate 343729 13 Sources: 1 st two Yale/GMU 2013; 2 nd two Duke U. 2013

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What do These Data Mean for Policy Makers? In the abstract, the public likes energy efficiency, renewables, natural gas –Facilitating these through subsidies and other means likely will be favorably received It does not much like coal or nuclear power –Not much political gain from facilitating these It favors a carbon tax until it’s asked to pay, but might go along if the monies were returned directly to taxpayers – Carbon tax/rebate mechanism would have to be well explained It may favor a small increase in the federal gas tax if the monies are devoted to improvements that affect driving –Might be scope for a small gasoline tax increase if uses of revenues can be constrained to things the public favors 14

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What do They Mean for Energy Economists? Public attitudes matter to policy choices, but these attitudes aren’t fixed –Other things also affect policy choices –Well grounded economic analyses of costs and benefits of policy choices can and sometimes do shape public opinion Policy makers look to economists among others to inform them of the consequences of policy actions –Policy makers want to avoid unpleasant surprises, look to analysts to help –Ability to explain results of good analysis to policy makers and to the media sometimes as important as the analysis itself –Energy economists in a position to add value to public debate, policy choices 15